Chat with this content: Summary, Analysis, News...
Share on Reddit
RTL Group: Europe's Broadcast Empire in the Streaming Age
I. Introduction & Episode Roadmap
Picture this: a tiny principality wedged between Belgium, Germany, and France—barely visible on most maps—housing one of Europe's most consequential media empires. Luxembourg, with its population smaller than most European cities, has served as the unlikely birthplace and ongoing headquarters of a company that today touches hundreds of millions of viewers across the continent.
RTL Group S.A. ("Radio Télévision Luxembourg") is a Luxembourg-based international media conglomerate owned by the Mohn Family, and it represents something remarkable in the annals of business history: a commercial broadcaster that survived the transition from radio to television, navigated European deregulation, and now finds itself at the precipice of yet another transformation—the shift from linear to streaming.
RTL Group is known for producing a wide range of television content such as talent and game shows, reality shows, soaps, dramas, documentaries, and cartoons. In addition to traditional broadcasting, the company offers streaming services and maintains a robust presence in the digital video business.
RTL Group is one of a total of eight divisions of Bertelsmann: It is responsible for more than a third of its revenue and a large share of its operating profit. When Bertelsmann reported consolidated revenues of approximately €19 billion in 2024, RTL Group's contribution of €6.3 billion represented a significant pillar of the German media giant's operations.
The central question driving this analysis is deceptively simple yet profoundly complex: How did a radio station born from regulatory arbitrage in the 1930s evolve into Europe's dominant commercial broadcaster—and can it successfully navigate the existential threat posed by Netflix, Amazon, and Disney?
The themes that emerge are timeless business lessons: The power of regulatory arbitrage. The value of format licensing as an asset-light content strategy. The challenge of consolidation when regulators see the world differently than operators. And the existential question facing all legacy media: How do you compete with global tech giants when your strength lies in local markets?
II. Origins: Radio Luxembourg & The Birth of Commercial Broadcasting in Europe (1920s–1950s)
The story of RTL Group begins not in a corporate boardroom but in the attic of a private home in Luxembourg. In 1924, radio technician François Anen built a 100-watt transmitter in his home in the Grand Duchy of Luxembourg. This was no ordinary hobbyist project—it was the seed of what would become Europe's first commercial broadcasting empire.
Within two years, the government of Luxembourg had reached an agreement to subsidize the station to broadcast military music concerts and plays performed in the Luxembourgish language. But Anen had bigger ambitions. Anen became inspired by the activities of Captain Plugge, who was using transmitters licensed in other countries to broadcast English-language radio programmes to Britain and Ireland, whose governments had not licensed commercial broadcasting. On 11 May 1929, he brought together a group of mainly French entrepreneurs to form the Luxembourg Society for Radio Studies.
What Anen and his collaborators understood—perhaps before any other media entrepreneurs in Europe—was the power of regulatory arbitrage. In an era when most European nations maintained strict state monopolies on broadcasting, tiny Luxembourg represented an opportunity: a sovereign nation that could grant broadcasting licenses, positioned at the geographic center of the Continent, with powerful transmitters capable of reaching millions of listeners across borders.
On 19 December 1930, the government of Luxembourg passed a law awarding a monopoly licence to operate a commercial radio broadcasting franchise from the Grand Duchy. On 29 December, this licence was awarded to the Society, which in turn created the Luxembourg Broadcasting Company (Compagnie Luxembourgeoise de Radiodiffusion) to be identified on the air as Radio Luxembourg.
The roots of RTL Group date back to the 1920s. The company itself was established in 1931 as the Compagnie Luxembourgeoise de Radiodiffusion (known as CLR for short). It was one of the world's first private broadcasting companies.
The scale of ambition was remarkable. After an experimental programme, Radio Luxembourg made its first regular long wave broadcast on 15 March in French and German, from the Villa Louvigny's studios, using the most modern and powerful (200kW) transmitter in Europe: the site in Junglinster. By 1934 Radio Luxembourg was using 200,000-watt transmitters to send popular commercial radio programs from the tiny duchy across Europe. As no other European country then offered advertising-supported entertainment and popular music, Radio Luxembourg soon attracted about half of the total radio listeners across the Continent.
This was the first major lesson of CLR: When incumbents are constrained by regulation, find the jurisdiction where innovation is possible. The Luxembourg model—a tiny nation with outsized regulatory flexibility—would prove remarkably durable across the following decades.
The English-language service of Radio Luxembourg began in 1933 as one of the earliest commercial radio stations broadcasting to both the UK and Ireland. The station provided a way to circumvent British legislation which until 1973 gave the BBC a monopoly of radio broadcasting on UK territory and prohibited all forms of advertising over the domestic radio spectrum.
English programmes from Luxembourg enjoyed growing popularity among British listeners, especially as the Sunday broadcasts on the BBC were rather austere in accordance with the Sunday Observance restrictions, whereas Radio Luxembourg broadcasts jazz and light music.
The cultural impact was profound. Radio Luxembourg helped introduce American jazz, rock and roll, and commercial pop music to European audiences who had been accustomed only to state-sponsored programming. When the BBC limited music on Sundays to religious content, Radio Luxembourg played the hits. It boasted the most powerful privately owned transmitter in Europe (200 kW, broadcasting on long wave). In the late 1930s, and again in the 1950s and 1960s, it had large audiences across Britain and Ireland with its programmes of popular entertainment.
The Second World War brought interruption. The station was closed three weeks after the beginning of World War II, because the grand duchy of Luxembourg wanted to keep neutral. However, Luxembourg was occupied by Nazi-Germany, and the station became part of the GroĂźdeutscher Rundfunk. When on 8 May 1940 Luxembourg, a neutral country since 1867, fell into the hands of Nazi Germany, the transmitter became part of the German Reichssender network, and remained so until Liberation in September 1944.
After the war, Radio Luxembourg resumed its commercial service and reached even greater heights in the 1950s, becoming a cultural institution for young Europeans and demonstrating that commercial media could thrive when regulations permitted. For investors examining RTL Group today, this origin story provides essential context: the company's DNA includes regulatory creativity and an understanding that geography can be arbitraged for competitive advantage.
III. Television Expansion & The CLT Era (1950s–1980s)
The transition from radio to television represented the first major technological pivot in RTL's history—a transformation that foreshadowed the digital challenges the company would face decades later.
After the Second World War, the company ventured into the world of television broadcasting. It was renamed Compagnie Luxembourgeoise de Télédiffusion (CLT) to reflect this new service in 1954. The name change was significant: "Radiodiffusion" became "Télédiffusion," signaling the company's commitment to the new medium.
The management of CLR enters into a new era of broadcasting: television. On 1 July, CLR becomes CLT (Compagnie Luxembourgeoise de Télédiffusion) and begins the construction of a TV transmitter and studio in Dudelange.
This was no trivial undertaking. Television required vastly more capital than radio—studios, cameras, production facilities, and new transmitter infrastructure. But CLT had developed a crucial capability during the radio era: the ability to serve multiple language markets from a single base. This multi-language strategy would prove essential in television.
The timing also mattered. On 22 September, the commercial TV channel ITV starts broadcasting from London. This affects Radio Luxembourg as a number of its sponsored programmes move to ITV. Sponsorship now switches mainly to record companies such as Decca and EMI. The British launch of ITV demonstrated that commercial television could succeed in Europe—and also created competitive pressure that pushed CLT to accelerate its own television ambitions.
The subsequent decades saw CLT expand its television footprint across Europe, though progress varied by market. When the European media markets were liberalised in the 1980s, television became increasingly important and started to overtake radio. In the 1980s, Belgian and French media companies made up the majority of the shareholders of CLR and CLT.
The 1980s marked a crucial inflection point. European governments began deregulating their broadcasting markets, opening opportunities for commercial television that had previously been restricted to public broadcasters. CLT was perfectly positioned to capitalize—it had the experience, the production capabilities, and critically, the regulatory template from Luxembourg.
For investors, the CLT era demonstrates an important principle: companies that survive technological transitions often do so by maintaining core competencies (content production, advertising sales, regulatory navigation) while adapting their delivery mechanisms. CLT's success wasn't guaranteed by its radio heritage, but that heritage provided the organizational capabilities necessary to succeed in television.
IV. The Deregulation Goldmine: RTL Plus & German Private TV (1984–1997)
January 2, 1984, marks one of the most consequential dates in European media history. On that day, Germany's first private television channel launched—and it would transform the European broadcasting landscape forever.
It was in 1984 when CLT together with the German Bertelsmann group's film and TV production subsidiary UFA launched the German commercial TV channel RTL +, in which CLT held 46.1 percent and Bertelsmann 38.9 percent of the share capital.
RTLplus (renamed RTL Television in 1992) was founded by CLT and UFA in 1984. The Bertelsmann Group held 40% of the shares in RTL via UFA Film und Fernsehen GmbH. The Austrian Helmut Thoma became the first director of RTLplus and, together with Bertelsmann's CEO at the time, Mark Wössner, was a driving force behind the introduction of private television in Germany.
Helmut Thoma's story deserves attention. Here was an Austrian lawyer who had joined Radio Luxembourg, worked his way through the advertising and radio divisions, and in 1984 was handed the opportunity to launch Germany's first commercial television channel. He was the man who made RTL big: for the Austrian Helmut Thoma, the Cologne-based private broadcaster was his "baby." Thoma had made RTL the most successful commercial television channel in Germany in the 80s and 90s - he was considered the "king of private television."
Thoma had come to the media industry in a roundabout way. Born in Vienna, he first completed a dairy apprenticeship in Austria, then studied law and joined the Austrian Broadcasting Corporation (ORF) as a legal advisor. After working for an RTL advertising subsidiary and in radio, Thoma became director of the German programs of RTL and RTL plus in 1984. The relocation of RTL from Luxembourg to Cologne and the entry of Bertelsmann marked the beginning of the station's rise.
Thoma's programming philosophy was unapologetically populist. RTL introduced formats that the staid public broadcasters would never touch—game shows, reality programming, celebrity entertainment. "I always paid attention to the audience, and I valued television as a service to the customer," Thoma revealed in a later interview as his secret to building a successful television company. During his time, he made many mostly profitable decisions, always with an eye on the ratings, such as the launch of the German daily soap "Gute Zeiten, schlechte Zeiten" (GZSZ) and the game show "Tutti Frutti" with plenty of nudity.
"RTL was repeatedly confronted with the accusation of lacking quality. Thoma, who was rarely at a loss for striking phrases, took it lightly: 'I always said: In shallow waters, at least you can't drown.' Or: 'The bait must taste good to the fish.'"
The criticism was real, but so were the results. He held this position until 1998, during which he built the company from a "25-man operation" into an industry giant. Under his leadership, RTL achieved annual market shares of over 17 percent at times - something hardly imaginable for the private broadcaster today.
The expansion continued beyond Germany. Another major launch was the French channel Metropol 6 (M6) in 1987. At the end of the 1980s television replaced radio as CLT's major revenue source. In 1991, CLT moved company headquarters and its radio unit to Kirchberg on the outskirts of Luxembourg where it soon built new facilities for its growing TV division. By 1991, TV contributed 70 percent to CLT's total sales, and most of that came from RTL. 79 percent of all German households were able to receive RTL through antennas, satellite dishes, or cable.
Thoma passed away on his 86th birthday in May 2025. "There is no one in Europe who, like me, has built a television station from scratch and led it to market leadership," he once noted—and the historical record supports his claim. His legacy at RTL demonstrates how decisive leadership, combined with regulatory opportunity, can create extraordinary value.
For investors, the German private television story offers several lessons. First, deregulation creates once-in-a-generation opportunities for value creation. Second, first-mover advantage matters enormously in media—RTL's early establishment in German living rooms created viewer habits that persisted for decades. Third, the willingness to give audiences what they want, rather than what critics think they should want, can be a powerful competitive advantage.
V. The CLT-UFA Merger & Creation of RTL Group (1997–2001)
The late 1990s witnessed a wave of media consolidation that would reshape the European broadcasting landscape. The formation of RTL Group as we know it today emerged from this period of strategic deal-making.
In the late 1990s, consolidation activities of the global media industry accelerated. Further geographical expansion and digital TV technology required significant financial investments and CLT started looking for suitable strategic partners. The cooperation with Bertelsmann had not been without friction.
There were disputes over Bertelsmann's policies in connection with Cologne-based TV project Westschiene, where CLT accused the company of being involved in conflicting activities, and the German commercial TV channel VOX, where CLT was left out in favor of Rupert Murdoch's News Corporation. However, after Bertelsmann's successful negotiations with CLT's majority shareholder Audiofina, CLT and Bertelsmann announced their intention to merge CLT with UFA in spring 1996, and the merger became effective in 1997.
A merger agreement was signed on 8 July 1996. It was approved by the CLT board of directors on 5 December, and the formation of CLT-UFA was completed on 14 January 1997. As a result, German television channels such as RTL Television and VOX and international broadcasting services, including M6 in France, were all brought together under one roof.
The logic was compelling: combine CLT's broadcasting heritage and Luxembourg regulatory base with Bertelsmann's UFA production capabilities and German market presence. UFA GmbH, shortened to UFA, is a film and television production company that unites all production activities of the media conglomerate Bertelsmann in Germany. The original UFA was established as Universum-Film Aktiengesellschaft on December 18, 1917, as a direct response to foreign competition in film and propaganda.
UFA represented deep production expertise—a century of German filmmaking history. In 1964, Bertelsmann purchased the already broken-up UFA from the Deutsche Bank and built on its presence in cinema and television. By merging CLT with UFA, the new entity combined distribution (broadcasting) with production—a vertical integration strategy that presaged contemporary debates about content ownership versus distribution.
RTL Group itself was created in spring 2000 following the merger of Luxembourg-based CLT-UFA and the British content production company Pearson TV, owned by UK media group Pearson PLC. CLT-UFA itself was created in 1997 when the shareholders of UFA (Bertelsmann) and the historic Compagnie Luxembourgeoise de Télédiffusion – CLT (Audiofina) merged their TV, radio and TV production businesses. Bertelsmann has been the majority shareholder of RTL Group since July 2001.
The two companies joined forces to create RTL Group, Europe's leading network of television channels and radio stations with a global content business, which was rebranded FremantleMedia in 2001 (now called Fremantle). This merger was designed to provide a strong European response to U.S. media dominance. RTL Group was first listed on the London Stock Exchange on 26 July 2000.
The Pearson transaction was particularly significant because it brought Pearson Television's extensive format library and production capabilities into the RTL fold. This would form the foundation of what became Fremantle—one of the world's largest content production companies.
Although Bertelsmann initially only held a minority share in RTL Group, the German conglomerate managed by Thomas Middelhoff set its sights on playing a leading role within the group. After exchanging shares with the Groupe Bruxelles Lambert in 2001, Bertelsmann achieved its goal of becoming the majority shareholder of RTL Group and thus secured a leading position in the European television market.
For investors, the CLT-UFA-Pearson transaction sequence demonstrates how consolidation can create strategic optionality. By bringing together broadcasting, production, and format licensing under one corporate umbrella, RTL Group gained both vertical integration benefits and geographic diversification. The deal also established Bertelsmann's dominant position—a control structure that remains in place today.
VI. Fremantle: The Global Content Factory
While RTL Group's broadcasting operations capture most investor attention, the company's content production arm—Fremantle—represents perhaps its most valuable strategic asset and clearest competitive moat.
Fremantle owns of a number of non-scripted formats, including the talent shows Idol, Got Talent, and The X Factor (the latter two with Simon Cowell's Syco Entertainment), and game shows via its ownership of the libraries of American producer Goodson–Todman Productions, Australian producer Reg Grundy, and others.
The first incarnation of Fremantle was founded in 1952 by Paul Talbot as Fremantle Overseas Radio and Television and later renamed as Fremantle International in 1958, named after the city in Western Australia. The company's history is thus nearly as old as RTL Group itself, though it came under RTL's umbrella through the Pearson acquisition.
The format licensing model represents a capital-efficient approach to content creation. Consider how it works: Fremantle develops a television format—a concept, rules, branding, and production methodology—and licenses it to broadcasters around the world. Local producers create local versions, paying licensing fees and production fees to Fremantle while bearing the production risk. Fremantle earns revenue without funding production costs in dozens of countries simultaneously.
Amplifying local stories on a global scale, Fremantle produces and delivers premium, multi-genre IP across the 27 territories it operates in. Fremantle is a proudly independent group of content creators, and home to some of the biggest entertainment formats, compelling international dramas, award-winning films and high-quality documentaries. From Got Talent to Neighbours, Password to Poor Things, Fellow Travelers to Queens, Too Hot To Handle to Big Mood, Maxton Hall to Idols, and Priscilla to House of Kardashian.
The scale is extraordinary. Fremantle produces over 12,000 hours of programming per year and makes 450 shows. Fremantle also represents world-leading digital and branded entertainment, with more than 495 million fans and 300 billion views for its standout content across all platforms. Fremantle is part of RTL Group, a global leader across broadcast, streaming, content and digital, itself a division of the international media, services, and education company Bertelsmann.
Content is the lifeblood of RTL Group, as it drives audiences in broadcasting and streaming. Thomas Rabe, CEO of parent RTL Group, has provided the capital that helped turn Fremantle into The Hollywood Reporter's 2023 International Producer of the Year.
The strategic value of format ownership cannot be overstated. Content is the lifeblood of RTL Group, as it drives audiences in broadcasting and streaming. We spend more than $2.16 billion (€2 billion) on content every year, in addition to the Fremantle productions. Fremantle is one of the world's largest creators, producers and distributors of scripted and unscripted content. Our target to reach 3 billion Euros in revenue by 2025 is ambitious.
The Got Talent franchise exemplifies the model's power. Co-owned with Simon Cowell's Syco Entertainment, Got Talent has been localized in over 70 countries. America's Got Talent, the U.S. version, consistently ranks among NBC's highest-rated programs. Each local version generates production fees, licensing revenue, and ancillary sales. The format itself—a talent competition with a panel of judges—has proven extraordinarily durable, sustaining profitability for nearly two decades.
Importantly, Fremantle's flagship entertainment formats continue to be successful. In the first half of 2023, for example, Fremantle formats America's Got Talent and American Idol significantly outperformed prime-time averages of the respective TV networks in the US. In the UK, Fremantle produces the country's two leading entertainment shows: The Apprentice and Britain's Got Talent.
On the creative side, Fremantle enjoyed a banner 2024, with Yorgos Lanthimos' Poor Things, produced by Fremantle-owned Element Pictures, picking up four Oscars. But with revenues of €2.25 billion ($2.45 billion), Fremantle is still a long way off its stated target of €3 billion ($3.26 billion) in annual revenues. RTL on Thursday casually moved the goalposts for that target, saying it hopes to hit the €3 billion mark "mid-term," not by 2026, as originally forecast.
For investors, Fremantle represents RTL Group's most defensible competitive position. Format ownership provides recurring revenue with relatively low capital intensity. The library of formats constitutes an intangible asset that appreciates as new territories adopt existing formats and new formats are developed. In a world where streaming platforms are rationalizing content spending, owning proven formats becomes increasingly valuable.
VII. Bertelsmann's Tightening Grip & Frankfurt Listing (2001–2013)
Understanding RTL Group requires understanding Bertelsmann—the German media conglomerate that controls it. And understanding Bertelsmann requires understanding the Mohn family that controls Bertelsmann.
Even though the family does not bear the surname of the founder, Carl Bertelsmann, the Bertelsmann Group has been in the hands of the Mohn family for over 120 years. Towards the end of the 19th century, Johannes Mohn married the founder's granddaughter and took over the still small family business. However, it took another two generations and the end of the Second World War before Reinhard Mohn took over the company and expanded it into a global corporation over the following decades.
Reinhard Mohn (29 June 1921 – 3 October 2009) was a German billionaire businessman and philanthropist. Under his leadership, Bertelsmann, once a medium-sized printing and publishing house, established in 1835, developed into a global media conglomerate. In 1977, he founded the non-profit foundation Bertelsmann Stiftung, which is today one of the largest foundations in Germany, with worldwide reach.
The ownership structure of Bertelsmann—and by extension RTL Group—is deliberately complex. Bertelsmann SE & Co. KGaA is a privately held Kommanditgesellschaft auf Aktien (KGaA; partnership limited by shares). 80.9 percent of the capital shares in Bertelsmann SE & Co. KGaA are held indirectly by foundations (Bertelsmann Stiftung, Reinhard Mohn Stiftung, BVG-Familienstiftung, BVG-Stiftung), and 19.1 percent are held indirectly by the Mohn family. All voting rights at the General Meeting of Bertelsmann SE & Co. KGaA and Bertelsmann Management SE (general partner) are controlled by Bertelsmann Verwaltungsgesellschaft (BVG).
As early as the 1970s and 1980s, the Mohn family built up the Bertelsmann Stiftung, which has owned the majority of shares in Bertelsmann since 1993. In addition to social responsibility, tax considerations played a role in this. Moreover, this strategy was intended to preserve the continuity of the company. Today, according to Bertelsmann, the Mohn family holds 19.1% of the shares.
Reinhard Mohn died in 2009, and since then his wife Liz Mohn has been running the foundation and the group. Since 2021, Reinhard Mohn's son Christoph Mohn has held the influential position of chairman of the management company's (BVG) steering committee. Christoph Mohn holds the chair and thus has a veto right, ultimately controlling the entire group. Another measure taken by Reinhard Mohn to secure his legacy was the establishment of the Bertelsmann Foundation.
This foundation-based ownership structure provides remarkable stability but also creates unique dynamics. Bertelsmann is capital market-oriented but not publicly traded, meaning it does not face the quarterly earnings pressure that publicly listed media companies experience. RTL Group, however, is publicly traded—creating a two-tier governance structure where the parent company has different incentives than minority shareholders in its subsidiary.
Over the years, Bertelsmann increased its stake in RTL Group to more than 90%. Bertelsmann's initial aim was to acquire full ownership of RTL Group to reduce administrative costs, but this plan failed in 2007 due to uncertainties in Luxembourg law. The conglomerate responded by altering its strategy and in 2013, it sold a minority interest in RTL Group on the Frankfurt Stock Exchange to finance the growth of Bertelsmann and especially its digital transformation. Media reports responded positively to the secondary listing of RTL Group and the resulting availability of shares open to external investors.
As of 2024 Bertelsmann, a conglomerate based in the German city of GĂĽtersloh owns 76% of the shares in the company, after holding a stake of more than 90% in the past.
For investors, the ownership structure presents both opportunities and risks. The stability of family/foundation ownership reduces the risk of activist intervention or hostile takeover, but it also means minority shareholders have limited influence over capital allocation and strategic decisions. When evaluating RTL Group stock, investors are effectively betting that Bertelsmann's leadership will make decisions that benefit all shareholders—not just the controlling family.
VIII. The Streaming Era: Netflix Arrives & RTL's Response (2015–2022)
The emergence of Netflix as a European force represented the most significant competitive challenge RTL Group had faced since its founding. Unlike previous competitors—national broadcasters, cable operators, or pan-European networks—Netflix operated on a fundamentally different model: subscription-funded, on-demand, globally scaled, and backed by virtually unlimited Silicon Valley capital.
According to Ampere's Media Consumer Behavior Tracker, commercial broadcasters have seen an average 16 percent decline in consumer engagement across Europe's big five markets since 2016. Their content spending budgets have fallen by 19 percent since then. It also highlighted a decline of nearly 1 billion euro ($1.3 billion) in the linear TV advertising market over the past decade.
Observers have repeatedly criticised RTL Group for having "missed the boat in the streaming era". Thomas Rabe, chairman and chief executive officer of Bertelsmann, has responded to this criticism by campaigning for the deregulation of the highly competitive television market to enable the establishment of national alternatives to the "giants of Silicon Valley".
RTL's response evolved through several phases. Initially, the company invested in its existing digital properties. In addition to the RTL TV channel, RTL Deutschland also includes 14 other TV channels, numerous radio stations and digital offerings. Since the merger with the Bertelsmann publishing subsidiary Gruner + Jahr in 2022, the company's portfolio has also included various print magazines.
The Gruner + Jahr acquisition represented a strategic bet on cross-media integration. Renewal of distribution partnership with Deutsche Telekom until at least 2030; announced acquisition of Sky Deutschland (DACH) to boost RTL Group's streaming business and further diversify revenue streams.
Thomas Rabe emerged as the central figure in RTL's transformation strategy. Thomas Rabe (born August 6, 1965, in Luxembourg City) is a German business executive. He is currently the chairman of the German sportswear brand Adidas. In 2006, he was appointed to the Bertelsmann executive board, of which he has been chairman and chief executive officer since 2012. Under his leadership, the group has become more international, more digital and more diversified. In particular, he has advanced the business with music rights and the educational division. Additionally, Rabe was appointed chief executive officer of RTL Group in 2019.
Rabe was born in 1965 in Luxembourg and grew up in Brussels, where his father worked as a civil servant in the European Coal and Steel Community from 1968. He attended the European School and as a youth was a bass player in a punk band. After completing his German baccalaureate (Abitur), Rabe studied Business and Economics at the RWTH Aachen and the University of Cologne.
Rabe's "national champions" strategy became the organizing principle for RTL's response to global streaming competition. The logic: if RTL cannot match Netflix's global scale, it can dominate individual national markets through consolidation and cross-platform integration. "We strongly believe that in-country consolidation is essential to ensure long-term competitiveness," says Thomas Rabe. "Scale within national markets unlocks significant synergies and enables greater investments in content, technology and innovation."
Thomas Rabe describes the acquisition as "transformational" for RTL Group's streaming business: "It will take us to around 11.5 million paying subscribers in the DACH region, making us the clear number three streaming provider. We will further diversify our revenue streams and enhance our appeal to creative talent, rights holders and business partners."
For investors, the streaming era posed a fundamental question: Can a regional broadcaster compete against globally scaled tech platforms? RTL's answer—the national champion strategy—represented a pragmatic acknowledgment that competing directly with Netflix was unrealistic. Instead, RTL would leverage its local content advantages, regulatory relationships, and advertising sales capabilities to dominate individual markets.
IX. The Failed French Dream: TF1-M6 Merger Saga (2021–2022)
No episode better illustrates both the promise and peril of RTL's national champion strategy than the attempted merger of TF1 and M6 in France—and its ultimate collapse.
On May 17, 2021, the Bouygues Group (the "Notifying Party"), a French conglomerate and parent company of TF1, the main French free-to-air television player, announced its intention to acquire exclusive sole control of the Métropole Télévision group ("M6"), the second main French free-to-air television player in France, owned by RTL group and ultimately controlled by Bertelsmann. The Transaction aimed at creating a French leader in the sector, gathering 10 television channels and over 40% of the television audience.
European broadcasting giant RTL Group reaffirmed its belief the merger of its French subsidiary M6 with local rival TF1 must go ahead to keep competing with the likes of Netflix, Disney+ and Amazon.
The strategic logic was compelling. Together, TF1 and M6 would have commanded approximately 75% of the French television advertising market and possessed the scale to invest meaningfully in streaming content. The merged entity would have been France's largest commercial broadcaster by any measure.
They went on to criticize the competition authority for "failing to take into account the speed and extent of the changes sweeping through the French broadcasting sector," with RTL recently saying the merger was necessary to keep competing with the likes of Netflix, Amazon and Disney+. "We continue to firmly believe that a merger of the TF1 and M6 groups would have provided an appropriate response to the challenges resulting from the increased competition from the international platforms."
But French regulators saw it differently. It said it had identified "significant competition problems" and was "not favourable" to the merger in its current format.
The competition authority first examined the merger in March and said in July it had found "significant competition problems" mainly relating to advertising. "Following the debates with the Authority and despite the additional remedies proposed, it appears that only structural remedies involving at the very least the divestment of the TF1 TV channel or of the M6 TV channel would be sufficient to approve the proposed merger."
Bouygues, RTL Group, Groupe TF1 and Groupe M6 have today decided to call off their plan to merge the TF1 and M6 groups that was announced on 17 May 2021. This decision comes after the parties appeared at the hearings of the French Competition Authority's board (Collège) on 5 and 6 September 2022 to argue in favour of the benefits and necessity of the deal. Following the debates with the Authority and despite the additional remedies proposed, it appears that only structural remedies involving at the very least the divestment of the TF1 TV channel or of the M6 TV channel would be sufficient to approve the proposed merger. The parties have therefore concluded that the proposed merger no longer has any strategic rationale.
The failure had immediate financial implications for RTL Group. M6 had been positioned as an asset for sale; now RTL retained it. On 22 September 2022, Thomas Rabe, CEO of RTL Group's parent company, Bertelsmann confirmed that Groupe M6 is up for sale, after the failed merger with TF1 Group.
The failure of the merger will please opponents such as service provider Free, which argued that the pair should not be allowed to merge because the combined entity would control 75% of the French TV advertising market.
For investors, the TF1-M6 saga reveals a structural challenge for RTL's national champion strategy: European competition regulators continue to analyze media mergers through traditional advertising market frameworks, even as the competitive landscape has been transformed by global streaming platforms. The regulators' refusal to consider Netflix, Amazon, and YouTube as relevant competitors to traditional broadcasters may be analytically debatable—but it represents the regulatory reality RTL must navigate.
X. The Big Bet: RTL Nederland Sale & Sky Deutschland Acquisition (2023–2025)
With the TF1-M6 merger blocked, RTL Group pivoted to a different strategic combination in its largest market: Germany. The execution involved two major transactions that fundamentally reshaped the company's portfolio.
First, the disposal. "For several years, we have consistently said that market consolidation in the European TV industry is necessary to compete with the global tech giants," said RTL CEO Thomas Rabe. "After our in-country consolidation strategy was blocked by the competition authorities in January 2023, the sale to DPG Media is the best strategic option for RTL Nederland and all its stakeholders."
In December 2022, it was announced that the RTL Group was considering selling its Dutch TV station RTL Nederland. After merger plans failed in 2023, it was officially announced in December that RTL Group was selling RTL Nederland for 1.1 billion euros to DPG Media.
The sale process proved protracted. The Netherlands Authority for Consumers and Markets (ACM) has cleared the acquisition of Dutch media company RTL Nederland (RTL) by DPG Media (DPG). However, DPG does need to comply with an extensive set of conditions. These conditions ensure that the acquisition will not have any negative effects on media pluralism, and that news consumers continue to have access to sufficient independent news sources.
RTL Group has confirmed it has closed the transaction on the sale of its RTL Nederland to DPG Media. In a statement, the company said the transaction to sell its Dutch business had been completed on 1 July 2025. The transaction, which was first announced in December 2023, was approved by the Dutch competition authority ACM last week. DPG Media is paying for €1.1 billion for the business.
The proceeds from the Dutch sale provided the capital for RTL's most transformative transaction in decades: the acquisition of Sky Deutschland.
~11.5 million paying subscribers across RTL+, Sky and WOW; Diversification of RTL Group's revenue streams across subscription, distribution and advertising; €250 million in expected annual synergies within three years after closing; €150 million upfront purchase price, with additional variable consideration linked to future value creation.
German media giant RTL Group has signed an agreement to buy Comcast-owned pay-TV platform Sky Deutschland. The deal brings together two top media brands in the region, creating a business with roughly 11.5 million paying subscribers.
Thomas Rabe, CEO of RTL Group, commented: "The combination of RTL and Sky is transformational for RTL Group. It will bring together two of the most powerful entertainment and sports brands in Europe and create a unique video proposition across free TV, pay-TV and streaming. It will boost our streaming business, with a total of around 11.5 million paying subscribers, further diversify our revenue streams and make us even more attractive for creative talent, rights holders and business partners. The synergies are estimated to be around €250 million per annum within three years after closing."
The transaction structure was creative. The purchase price amounts to €150 million in cash plus a variable consideration linked to RTL Group's share price performance. RTL will also have the right to use the Sky brand in the DACH region under a separate trademark licence. Until regulatory approvals are finalised, which is expected in 2026, RTL Deutschland and Sky Deutschland will continue to operate independently.
In addition to the upfront payment, the deal includes a conditional earn-out clause: if RTL Group's share price exceeds €41 within five years, Sky could receive up to €70 per share, capped at €377 million. At the time of the announcement, RTL shares were trading at €31.65.
The transaction combines Sky's premium sports rights – including Bundesliga, DFB-Pokal, Premier League and Formula 1 – with RTL's leading entertainment and news brands across RTL+, free-to-air and pay TV. RTL will acquire Sky Deutschland's streaming brand "WOW" as part of the transaction. Barny Mills, Sky Deutschland CEO, will continue to lead the Sky Deutschland business until the transaction is completed. Stephan Schmitter will stay in his current role as CEO of RTL Deutschland until closing of the transaction and then lead the combined company.
German media regulator KEK has given the green light for RTL Group's planned takeover of Sky Deutschland and its subsidiary NBC Universal Global Networks Deutschland. In its latest session, the Commission on Media Concentration (KEK) ruled that the acquisition, which RTL Group will carry out through its subsidiary RTL Deutschland, does not raise concerns over media plurality and diversity of opinion in Germany.
The pro-forma revenue 2024 of the combined company was €4.6 billion, with approximately 45 per cent of the total revenue coming from subscription-based revenue. The acquisition of Sky Deutschland is the largest transaction for RTL Group since its inception in 2000.
For investors, the Sky acquisition represents RTL's most significant strategic bet in decades. The €150 million upfront price appears modest relative to the subscriber base acquired, though the variable consideration could increase the total cost substantially. The real question is whether combining RTL's entertainment-focused AVOD/SVOD offering with Sky's sports-focused pay-TV platform creates durable competitive advantage against global streamers.
XI. 2024–2025: The Current State of Play
The past two years have marked a period of accelerating transformation for RTL Group, as the company executed its strategic pivot while navigating deteriorating advertising markets.
By the end of 2024, RTL Group had registered 6.764 million paying subscribers for its streaming services RTL+ in Germany and Hungary and M6+ in France, up 21.5 per cent year on year (31 December 2023: 5.569 million).
Streaming revenue was up 42.4 per cent to €403 million (2023: €283 million), driven by a significantly higher number of paying subscribers, increased subscription prices in Germany, and rapidly growing advertising revenue on RTL+ in Germany and M6+ in France. Distribution revenue was up 6.9 per cent to €354 million (2023: €331 million), driven by RTL Deutschland.
RTL's streaming subscribers in Germany, Hungary and France jumped 21 percent to 6.8 million last year, the company announced, with streaming revenue up 42 percent at $440 million.
The Stefan Raab partnership represents perhaps the most significant content investment RTL has made in years. RTL Deutschland and the popular TV entertainer Stefan Raab have agreed an exclusive five-year TV partnership. Raab and RTL made the announcement following the spectacular boxing match between Raab and former world champion Regina Halmich on Saturday evening. Raab's new weekly primetime show "Du gewinnst hier nicht die Million bei Stefan Raab" starts on RTL+ on Wednesday.
The partnership with Deutsche Telekom to bundle RTL+ Premium in Magenta TV and exclusive content such as Du gewinnst hier nicht die Million bei Stefan Raab contributed significantly to the growth. The first episode of the weekly show achieved the highest subscription growth for an original format on RTL+ to date – 73 per cent of these new subscriptions came from new customers and were male viewers aged between 30 and 49. Viewing hours for RTL+ in Germany increased by 66.6 per cent to 649 million hours in 2024, making RTL+ the leading German entertainment offering in the streaming market.
But the advertising market has proven increasingly challenging. RTL Group has reported that its group revenue for the first 9 months of 2025 was down 2.2 per cent to €4.1 billion, attributed to lower TV advertising revenue and lower content revenue from Fremantle; digital advertising revenue was up 31.7 per cent.
RTL reported continued growth for its streaming services: paying subscribers were up 17.4 per cent year on year to 7.6 million, and streaming revenue up 26.6 per cent in January to September 2025. RTL is aiming for 8 million paying subscribers by the end of 2025, and expects streaming start-up losses to be reduced by more than 50 per cent to around €50 million for the full year 2025.
Due to the decrease of the German and French TV advertising markets, RTL Group now expects Group revenue of €6 billion to €6.1 billion and Adjusted EBITA of €650 million for the full year 2025 (previous guidance: Group revenue of ~€6.45 billion and Adjusted EBITA ~€780 million). Thomas Rabe, outgoing CEO of RTL Group, commented: "The market environment remains challenging, with a reduction of TV advertising revenue in our core markets and an accelerated shift from linear TV to streaming."
With 7.6 million paying subscribers at the end of September, we are confident to pass the 8 million mark by the end of this year. In 2025, we will reduce streaming start-up losses by more than half to around €50 million and thus remain firmly on track for a profitable streaming business in 2026.
The leadership transition adds another layer of complexity. RTL Group, which operates over 50 TV channels in Europe, has announced that its CEO, Thomas Rabe, is to step down from his role. Rabe is also chair and CEO of RTL's parent company, Bertelsmann and had previously announced plans to step down from that role at the end of 2026. He has been CEO of RTL for the past six years. He will be replaced by Clément Schwebig, currently president and managing director, Western Europe and Africa at Warner Bros Discovery, who will step into his new role in May 2026. Schwebig began his career in the media industry at RTL Group, where he spent more than a decade managing television operations across Europe.
As of January 1, 2027, Thomas Coesfeld will succeed Rabe as chairman and CEO of Bertelsmann. Clément Schwebig will take over as CEO of RTL Group from Rabe in May next year.
For investors, the current state of play presents a complex picture. Streaming metrics are improving substantially, with subscriber growth and viewing hours both showing double-digit gains. However, the traditional TV advertising business continues to deteriorate faster than streaming can compensate. The €130 million EBITA guidance reduction announced in November 2025 underscores the magnitude of the advertising market challenge.
XII. Porter's 5 Forces & Hamilton's 7 Powers Analysis
Understanding RTL Group's competitive position requires both traditional competitive analysis and an examination of the company's structural advantages and disadvantages.
Porter's 5 Forces Analysis:
1. Threat of New Entrants (HIGH)
The traditional view that broadcasting carries high barriers to entry—requiring licenses, spectrum, and substantial capital—has been fundamentally disrupted by streaming technology. Netflix, Amazon, Disney, and Apple have demonstrated that global streaming platforms can enter any market with minimal regulatory friction.
Players like Netflix have saturated the market, and YouTube and other social video platforms present a new threat. To remain competitive, broadcasters must double down on their national roots, embrace GenAI, and collaborate and consolidate to build scale.
For decades, Europe's broadcasters have been the gatekeepers of home viewing. With their control of the airwaves—the main conduit into homes for video content—they shaped the viewing habits of millions. That era is rapidly ending. According to a census-balanced survey of 3,500 consumers in the UK, France, Germany, and Switzerland by BCG and NativeResearch, digital streaming and social video platforms reach 97% of viewers in those markets and account for 64% of weekly viewing time.
2. Bargaining Power of Suppliers (MODERATE-HIGH)
Content costs represent RTL's largest expense category, and suppliers increasingly hold leverage. Sports rights—particularly for premium football—have inflated dramatically. Streamers forecast to spend more than $12 billion collectively on rights in 2025, according to Ampere Analysis. Talent costs have similarly escalated, as evidenced by RTL's substantial investment in the Stefan Raab partnership.
RTL Group continued to invest significantly in content across all genres. This included investments in rights for live sports events and talent partnerships to strengthen its linear TV channels and gain new subscribers for its streaming services: In March 2024, Groupe M6 announced its acquisition of the exclusive free-to-air TV rights for the majority of the matches of the Fifa World Cup in 2026 and 2030.
3. Bargaining Power of Buyers (MODERATE)
Advertisers, RTL's primary customers, retain substantial negotiating power due to the availability of alternative advertising channels including Google, Meta, and other digital platforms. Television advertising markets in Germany and France declined more severely than anticipated, with second-half TV ad revenue expected to fall by high single-digit percentages instead of growing 2-3 percent as previously forecast. The accelerated shift from linear television to streaming fundamentally altered advertising revenue patterns during 2025.
On the subscription side, consumers have demonstrated willingness to churn between streaming services, though RTL+ has benefited from partnership with Deutsche Telekom that bundles streaming with telecom services.
4. Threat of Substitutes (VERY HIGH)
This represents RTL's most significant competitive challenge. The research demonstrates digital streaming and social video platforms have fundamentally altered viewing patterns. Gen-Z viewers allocate just 16% of their viewing time to linear television, contrasting sharply with baby boomers who dedicate 55% of their time to traditional broadcasts.
YouTube, TikTok, and social media platforms compete for the same attention that traditional television commands, often offering free, user-generated content that resonates with younger demographics.
5. Competitive Rivalry (HIGH)
RTL faces intense competition from multiple directions: public broadcasters (ARD/ZDF in Germany, France Télévisions in France); commercial rivals (ProSiebenSat.1 in Germany); global streamers (Netflix, Amazon, Disney+); and tech platforms (YouTube, TikTok). The competitive landscape has never been more complex.
Hamilton's 7 Powers Framework:
Scale Economies (MODERATE): RTL enjoys meaningful scale within individual national markets, particularly Germany. However, this scale advantage is limited compared to global streamers who amortize content costs across hundreds of millions of subscribers worldwide.
Network Effects (LIMITED): Unlike social platforms, broadcasting and streaming services demonstrate limited network effects. Watching RTL does not become more valuable as more people watch.
Counter-Positioning (MODERATE): RTL's focus on local content and live sports represents a form of counter-positioning against global streamers. Netflix cannot easily replicate "Deutschland sucht den Superstar" or Bundesliga rights without fundamentally changing its operating model.
Switching Costs (LOW-MODERATE): Subscriber switching costs are minimal for streaming services. However, the bundling of RTL+ with Deutsche Telekom's MagentaTV creates modest lock-in.
Branding (STRONG): RTL is one of the most recognized media brands in Germany, with decades of viewer relationships. This brand equity translates into advertising premium and subscriber acquisition advantages within German-speaking markets.
Cornered Resource (MODERATE): Fremantle's format library represents a cornered resource—competitors cannot license Got Talent, Idol, or other Fremantle formats without negotiating with RTL's subsidiary. Sports rights provide temporary cornered resources, though these must be continually renewed at escalating prices.
Process Power (LIMITED): RTL does not appear to possess proprietary processes that competitors cannot replicate. The company's production and distribution capabilities are sophisticated but not unique.
Key Performance Indicators to Track
For investors monitoring RTL Group's ongoing performance, three metrics deserve particular attention:
1. Streaming Subscribers and ARPU (Average Revenue Per User)
Streaming subscriber growth and revenue per subscriber will determine whether RTL can successfully transition from advertising-dependent broadcasting to subscription revenue. The company targets 9 million streaming subscribers by 2026 with streaming profitability. Progress toward these targets—and the revenue quality of acquired subscribers—represents the single most important KPI.
2. Total Advertising Revenue (TV + Digital)
The ability to maintain total advertising revenue as viewership shifts from linear to streaming will indicate whether RTL can execute the digital transition without revenue destruction. Digital advertising revenue for the first nine months reached €345 million, up 31.7% year-over-year, offsetting 70% of the TV advertising revenue decline. This offset ratio should be tracked quarterly.
3. Adjusted EBITA Margin
Given significant revenue headwinds, margin preservation through cost management will be critical. The company's ability to achieve the stated €250 million in synergies from the Sky Deutschland acquisition will directly impact profitability. Current guidance suggests meaningful margin compression in 2025; the trajectory of margins post-Sky integration will reveal whether the transformation creates or destroys shareholder value.
Bull Case vs. Bear Case
Bull Case:
RTL Group stands at an inflection point where decades of challenges—regulatory constraints, fragmented markets, limited scale—may finally resolve in the company's favor. The Sky Deutschland acquisition creates a uniquely positioned player in the German-speaking market, combining:
- Free-to-air television leadership with established viewer relationships
- Pay-TV premium sports content (Bundesliga, Formula 1, Premier League)
- Growing streaming platform approaching 8 million subscribers
- Deep content production capabilities through Fremantle
Within three years of closing, RTL Group targets annual synergies of around €250 million. "The combination of RTL and Sky provides a strong foundation for future growth: two of the most powerful entertainment and sports brands in Europe teaming up to create a unique video proposition across free TV, pay TV and streaming."
If streaming profitability is achieved in 2026 as projected, RTL would possess a diversified revenue model with subscription, advertising, and production income streams. The Stefan Raab partnership demonstrates capacity for talent acquisition that drives subscriber growth. The 2024 results showed streaming can grow fast enough to partially offset linear TV decline.
European regulators may eventually recognize that global tech platforms represent the relevant competitive set, potentially enabling future consolidation opportunities. The failed TF1-M6 merger logic remains sound; regulatory attitudes could shift.
Bear Case:
The structural decline of linear television advertising may accelerate faster than streaming can compensate. RTL Group operates in markets where streaming has overtaken traditional TV viewing, fundamentally altering the competitive landscape for advertising revenue.
RTL's streaming services, while growing, remain subscale relative to Netflix (with 282 million global subscribers as of late 2024) and other global platforms. The "national champion" strategy may prove inadequate if consumers increasingly prefer global platforms with deeper content libraries.
Content costs continue to escalate. Sports rights in particular face structural inflation as tech platforms with superior economics compete for premium properties. The Stefan Raab deal, reportedly involving €90 million in production commitments over five years, illustrates the cost of maintaining competitive content offerings.
The Sky Deutschland integration carries execution risk. Combining a free-to-air broadcaster with a pay-TV operator with a streaming service creates operational complexity. Promised synergies may prove difficult to achieve without alienating subscribers or degrading service quality.
Bertelsmann's controlling position means minority shareholders have limited ability to influence strategic decisions or capital allocation. If Bertelsmann prioritizes its private interests over public shareholders, RTL Group investors bear the consequences.
Leadership transition during a critical transformation period introduces uncertainty. Clément Schwebig's May 2026 arrival coincides with the projected streaming profitability milestone—a demanding timeline for a new CEO.
Conclusion
RTL Group's near-century journey from a radio station in Luxembourg to Europe's dominant commercial broadcaster represents a masterclass in navigating regulatory change, technological disruption, and competitive evolution. The company has survived—and often thrived through—transitions that destroyed countless competitors.
Yet the current challenge differs in kind from previous disruptions. Radio to television involved a new medium but similar business models. Deregulation created opportunity rather than threat. The streaming era, by contrast, threatens RTL's fundamental business model: advertising-supported free-to-air television.
The company's response—the "national champion" strategy executed through streaming investment, market consolidation, and the Sky Deutschland acquisition—represents a rational response to structural reality. RTL cannot match Netflix's global scale; it can dominate German-speaking Europe through combined free-to-air, pay-TV, and streaming presence.
Whether this strategy succeeds will determine whether RTL Group becomes a case study in successful transformation or another victim of the tech disruption sweeping media industries worldwide. The next 24-36 months—encompassing Sky integration, streaming profitability targets, and leadership transition—will prove decisive.
For investors, RTL Group offers exposure to an undervalued transformation story with meaningful option value if execution succeeds. The risks are substantial, but so is the potential reward if Europe's broadcast pioneer can navigate the streaming age as successfully as it navigated the radio-to-television transition seventy years ago.
Spotify
Apple Podcasts
Amazon Music
Audible
YouTube
Castbox
Pocket Casts